RE: 125 service 200 disconnect?
There are two possible scenarios as read with two possible answers.
1) You have a 125A Service with conductors rated for up to 125A as installed wired to a 200A panel with 200A breaker. This would be a violation.
2) You have a 125A Service with conductors rated for up to 125 A as installed wired to a 200A panel with a 200A breaker in that panel, fed by a 125A or less breaker at the main panel (assuming there are no other breakers in the main panel to potentially overload the system), then this is permitted and the 200A breaker in the subpanel is now just a service disconnect and not an overcurrent protection device. The 125A breaker regulates the available current to the subpanel.
As a general rule all current carrying portions of an electrical installation may be rated for a higher voltage/amperage/temp than required as long as the current limiting device (fuse/circuit breaker) is rated for the lowest V/A/temp portion of said configuration. There is one notable exception, and that is a multi-outlet circuit where the outlets themselves are the only devices rated for 15A while all other portions are rated for 20A including the CB, this scenario is permitted as each outlet can only accept a device designed to draw less than 15A (technically 12.5A due to the 80% rule) and there could potentially be another device plugged in to another outlet which would raise the total load above 15A whereas the individual outlets are not carrying greater than their rated 15A b/c they will not accept a plug for a device requiring higher current.